ISVs Still the Strategic Channel Segment at Salesforce.com

Strong Growth and Enhanced Toolset for SaaS Developers Announced

Beth Vanni – Vice President, Amazon Consulting

When Denzil Samuels, Salesforce.com’s new Channel Chief, asked how many people in the partner keynote session of last week’s Dreamforce event were developing applications using the company’s Force.com platform, about 75% of the audience’s hands shot up. This response reflects the very development-centric make-up of the SaaS leader’s current channel ecosystem. And, with stats like 97% growth of software OEM partners, 90% increase in ISV revenues and 210% increase in the number of ISV orders, it’s hard to argue this ongoing developer focus.

We applaud Salesforce for continuing this dedicated session for its growing partner community. This very internationally diverse community received a dedicated pep-talk from an assortment of Salesforce’s channel sale and operational leaders, plus product development managers. It was interesting that the ISV community still rolls up through Ron Huddleston, SVP of ISV Partners, who is not integrated with Maria Martinez’s Customers for Life organization, under which Samuel’s consulting partner-focused team fits. But, it was clear from the way this leadership team talked about their investments in partnering overall, that software development is still at the heart of their partnering expectations.

Perhaps the most impressive stat for ISV’s at this year’s show is a 51% increase in installs from products posted on the AppExchange. Touted as “the largest enterprise application repository”, the company has given themselves a big goal of over one million AppExchange installs by the end of the year. There are now over 100,000 corporate clients deploying some portion of the Salesforce sales or service cloud platforms that are targets for this growing set of SaaS applications. Ron Huddleston, SVP of ISV Partners, also touted a 433% increase in hiring within the ISV management team to provide additional architectural and sales support to their growing ISV community.

But the real rocks stars of this partnering keynote session were guess who? — the product guys — Byron Sebastian, SVP and GM of the Platform (which includes Force.com, Database.com and Heroku) and Andrew Smith, the Director of the Force.com platform. They should have been carrying electric guitars and wearing slashed black t-shirts, based on audience response. The big announcements from these two, which again catered to the developers in the audience, were Trialforce, a fully partner-branded and easily customized way to let ISVs offer trials of their applications, and an enhanced support tool that allows ISVs to let their customers grant them debugging rights live within the application.

Make no mistake about it – Salesforce.com has the DNA of an innovative software development team and a direct sales machine. Partnering is still relatively new to them. And, like with many innovative enterprise software companies, ISVs are the tip of the arrow used to attack new customers. Without having a broad set of feature-rich, easy to deploy and industry-relevant applications, Salesforce.com will forever remain “that CRM SaaS company.”

However, if there isn’t better cross pollination of their ISV and consulting partner segments and a broader set of integrators able to staff the professional services engagements needed to customize and integrate these applications, the company’s market momentum will definitely lag long-term. It’s a slightly different scenario, but think of all those cool, Unix-based Solaris applications Sun was pushing up hill for years ….. when their VAR and SI communities were only worried about moving hardware and displacing IBM and SGI. The synapses weren’t firing there, and look what happened. The 5 year innovation advantage Sun built in their Solaris Operating System and toolset withered. Salesforce.com has the distinct advantage of being a pure software organization, with a relatively small professional services team to compete with partners and no other major product categories to divert their focus. But, without the support of the broader integrator and VAR community over time, their ISV groupies will only take them so far.